Good morning, everyone, and thank you for joining us. Today, we announced an important step in taking Barrick back to the future as we combine with Randgold to create an industry leading gold company through the recommended all share merger of our two companies. Barrick and Randgold are cut from a single cloth. Mark has said Randgold was modeled on Barrick as it existed in its early years under the leadership of Peter Monk and Bob Smith, the very culture we at Barrick have spent the past four point five years working to recover. It is no accident then that I believe our two companies now think and act in the same way.
We share a deep commitment to a partnership culture, both within our companies and in our relationships with our external partners. We both employ a decentralized business model, a small, high quality corporate office focused on the disciplined allocation of human and financial capital. We are both obsessed with talent and relentless in our pursuit of operational excellence. We are both committed to financial prudence, particularly in maintaining a strong balance sheet. Perhaps most important, we are of one mind about the true source of shareholder value in the gold industry.
Per share returns over the long term as measured by growth in free cash flow per share. While we share the same culture, we also combine different strengths that are perfectly complementary. Randgold has the agility and swift footedness of a younger and smaller company, much like Barrick in its early years, while Barrick has the infrastructure and global reach of a large public company. Most important is this, Randgold has a proven ability to operate successfully in some of the most challenging environments in the world, while Barrick has been building relationships of depth and trust with China, which we believe offers financial and political risk mitigation. In a world of declining gold reserves, the combination of these two strengths is a competitive advantage.
There will be several other distinctive advantages. The combined company will have five of the world's top 10 Tier one gold assets by total cash cost. We will have the lowest total cash cost position among the senior gold peers, and we have the potential to add to these Tier one assets with extensive land positions in many of the world's most prolific gold districts. And finally, we'll be able to redeploy top talent across both organizations to create new value immediately in our most important regions. At Barrick, our merger with Randgold fulfills our vision of becoming one of the leading companies in any industry or region.
Today, we graduate from taking Barrick back to the future, and together with Randgold, we begin to sprint into the twenty first century. I will now hand it over to Mark to go through the presentation, after which we will both take your questions.
Thank you, John. Good morning, everyone. I'll agree with John that today we create a new champion for value creation in the gold industry. It was quickly apparent to me back in 2015 when we had our first conversation that we had similar visions for the industry's future. In the years since, John and his team have significantly restructured the Barrick balance sheet and reduced debt by several billion.
In recent months, we realized the power of combining forces to drive additional financial and operation gains between our organizations. And before I take you through the presentation, it's important that you familiarize yourself with the disclaimer. And so I'll just give you a moment to read it. So if we move on then, just to reinforce what John said, the motivation for this deal is a powerful one, and you can see here why, holding five out of the top 10 Tier one gold mines spanning several promising gold belts. Barrick will be the undisputed industry leader and have the lowest total cash cost position among senior gold peers.
These higher quality assets will be run by a management team that combines Barrick's efficient operational capabilities with Randgold's entrepreneurial skill and track record of successfully managing operations in complex regions. All of these attributes underpin our common vision for long term value creation. Barrick already holds three of the world's 10 Tier one assets based on life of mine, cost and production metrics. And Randgold will contribute two additional Tier one assets. The combined portfolio also includes several projects and recent discoveries that will support Barrick's market leadership far into the future.
Beyond these holdings, the company has the opportunity to build on existing partnerships and support alternate value initiatives. Likewise, the copper portfolio is rich in opportunities for investing in a high demand metal closely affiliated to gold. To deliver a world class business, as I've always said, you need world class people. Barrick will have a proven management team with a track record of creating wealth for all stakeholders and driving return on investment on invested capital, reducing costs and driving efficiency throughout a compelling portfolio of assets. Barrick also includes outstanding exploration operations.
As a geologist myself, I can personally attest to the quality of the combined team. John will remain as Executive Chairman, providing leadership at the Board level and guiding business systems on a macro level. As President and CEO, I'll have day to day operational control on the business. Graham will be the Chief Financial Officer and Kevin will be Head of Strategic Matters. Twothree of the Board will be initially be appointed by Barrick and onethree appointed by Randgold Directors.
In these key metrics, Barrick is the new leader with the highest EBITA margin and lowest total cash position cash cost position among senior gold peers, which means we will be able to invest in growing the business while at the same time returning capital to shareholders. This map shows the location of the combined group's portfolio of projects and operations. As you can see, about half of these are in what might be called complex jurisdictions. We don't have a choice of places to build mines. To thrive, we must go where the gold is.
Barrick's operational capabilities will be enhanced by combining with the Randgold team, which has a track record of developing and operating profitable gold mines in difficult environments. Barrick contributes a further dimension in the form of its strategic relationship with China. Together, we are fully equipped to manage and grow this portfolio, which offers the potential to deliver more Tier one assets. Together, these two businesses will create a truly dynamic new force in an industry. Barrick will offer a core investment with deep liquidity, a combined track record of success in discovering, developing and operating Tier one assets around the world, a diversified portfolio across terrains, prudent and disciplined management with a strong entrepreneurial flair and a significant re rating potential.
Barrick will focus on four things: the development of core assets and the sale of noncore assets continuing to decentralize management with mine based decision making, streamlining all operations and maintaining a powerful balance sheet supported by continued investments. There's going to be a significant potential to rewrite over time given the quality of the combined asset base and the proven management team. We will have the lowest total cash cost and the highest adjusted EBITA margin relative to other senior gold peers. Has been transformed in recent years with its focus on cost cutting and the disposal of non core assets. Barrick has reduced its debt quantum considerably, while also significantly improving its maturity profile.
It is now positioned for a new growth phase led by a strengthened executive team. Randgold, on the other hand, is the industry leader in terms of operational delivery, returns, margins and share price, delivering superior free cash flow. We will now be able to step beyond our African boundaries onto the global stage. I've talked you through the different elements on this slide, but the combination of our assets, our management teams and our shared approach to investment and growth gives shareholders ownership in which what we believe to be the industry's leader. At the heart of this merger is the two companies' shared belief that a gold mining business must calibrate itself to a changing market that demands real value creation to attract new investment.
It also must provide shareholders with a sustainable return base. Barrick is starting from a solid asset base with clear plans for optimizing performance and finding new opportunities. The merger will deliver value based not only on a takeover premium, but on a proven sorry, not on a takeover premium, but on a proven business methodology guided by a long term strategy and implemented by a results driven management team with strong leadership. Thank you very much for your attention, and we'll be happy to take questions. We do have Graham Shuttleworth and Catherine Royall with us as well to pick up questions that John and I aren't able to answer.
Ladies and gentlemen, that concludes our presentation. And we're now going to turn the call over to the operator to begin the Q and A session.
Thank We will take our first question from James Bell from RBC. Please go ahead. Your line is open.
Yes. Good evening or good morning. I'm not really sure what time it is. So just two questions. Firstly, there's obviously a lot of assets that look non core given the framework you've outlined.
I just wondered if you could talk a little bit about the timeline you might consider for disposals and if you would like to do a spin co for some of these assets, particularly the African assets?
So do you
want me
to answer? James, how's it? So we the starting point on this is that when you look at the combined business and what the NAV of the combined assets is today, that's going to be our guiding sort of reference. And our intention is to create value from that point. John has already signaled noncore assets in the sense of the Australian investments and the Papua New Guinea investments.
And both of those have strong partners. Both partners have indicated an interest to acquire those assets. And in Australia's case, we've got many more people who would like to who would have an interest in those assets. And so don't read into noncore as being neglect. We are still going to run those assets.
Our job is to make sure that we bring them to account and don't damage the NAV. On the African side, we see certainly within the Randgold portfolio, as you know, I've always talked about a set number of assets don't get running a small mine and running a big mine takes the same amount of management time. So we will certainly look to trade some of the smaller assets within the portfolio of Randgold Resources. At the same time, we see a huge opportunity to work Acacia and see how we can bring that to account, which has become a bit of an orphan in the portfolio. We do have two copper assets that will be managed by the African team.
And those assets will be we believe there's an opportunity to really lift them up, bring them really understand them and then we'll take that from there. And I'll come back to the copper point in a bit. As far as North America goes, Nevada has huge opportunity. We've spent a lot of time in Nevada with the Barrick team. We feel that the Barrick team has really progressed that portfolio and certainly highlighted the potential.
And therein lies not only the current Tier one asset projects or operations, but the opportunity to potentially deliver another two. You know that there's been ongoing debates about unification of Nevada and both John and I are very clear. We both are committed to driving this business to create value for the owners. And so one of the things that John has tried many times is to bring everyone to the party and see how we can unlock that value. And it's definitely an opportunity that we will again explore and repeatedly explore because as is with the gold industry, Nevada sort of emulates it.
The great assets, not necessarily all in the right hands and definitely not optimum when it comes to infrastructure and processing facilities. The other assets throughout the American portfolio, which we'll be working on. And then in the South America, we have the joint venture with Shandong in Veladero. That in itself has an opportunity to deliver a significant asset. It's certainly a different asset today than it was a few years ago.
And then one of the things that we are really excited about as a geo centric business is the whole El India the whole El India trend. And so we'll be, again, putting together a North American focused team to run the North American business. The South American team will be focused not only on bringing to account and dealing with the challenges around Pascua Lama and Veladero, but seeing how that we can either build on or bring in partnerships into the Peru assets. And more importantly, we'll have a dedicated team focused on building new opportunities throughout South America. Both Barrick in its current shape and Randgold have been actively chasing South American opportunities.
And we see that as a really important destination, which has enormous opportunity for both primary discoveries and also earning in on early stage projects. Does that answer your question, James?
Yes. No, that's some really useful color. Thanks for that, Mark. And then one more, which is maybe slightly selfish given it's focusing on the London side. But just in terms of canceling the London listing, are you able to give any guidance on what percentage of your shareholder base may be forced selling for sellers just because they can't hold North American paper?
James, it's Graham here. We have obviously done some work on we've done some analysis on that. And as you probably imagine, it's not an exact science. We understand that there'll be some pluses and some minuses on this in terms of some of the benefits that we'll get from the large capitalization in the North American market. So it's difficult to put a number on that, but we don't expect it will be significant.
Okay, that's perfect. Thanks very much, guys. As
well as that the majority of trading in the combined business by a long way is U. S. Based. And we've done as Graham said, we've done the studies. There's always an option to go back into the London Stock Exchange.
But when you really look at it and our consultation with our big shareholders, I think everyone's clear that the right place, the most efficient markets are in the markets that Barrick actually is in at the moment.
Okay, makes sense. We'll be sad to lose you, but thanks for the answers.
We'll pop by every three months, give you a cuddle.
All right. Thanks, Mark.
Thank you.
We will now take our next question from Laurence Heller from JPMorgan. Please go ahead. Your line is open.
It's Luke here. Just for you, Mark, you've historically seen your area of expertise as predominantly African based. So can we read into this as any change in your perceived risk profile around the continent and maybe your focus on how future investments in the combined entity may stack up? Then secondly, on cash return. Should I ask the second question or let you
Carry on the second question, I've got it.
Well, it's just on cash returns. Obviously, you guys have a pretty under in Randgold, a clear cash returns policy. This morning, you said that your dividends going forward, you expect to grow from the 2018 base over time? Just any idea of how you're thinking about shareholder returns over and above that comment going forward would be of interest. Thank you.
How's it, Luke? So the risk profile, we have this conversation every time we meet. This is about Tier one assets. And what we've always said and I've always said, high quality assets, no matter where they are, and deliver returns and they support the host country or partnership requirements. And both John and I believe that's the right approach.
You've seen his engagement in an attempt to deal with Acacia and Tanzania. And I've always been absolutely clear that one thing the industry doesn't do is when you deliver profitable businesses in emerging markets, it means you don't pay tax. That means you've become an unwelcome partner to your host country. And so we have Tier one assets, and we believe that's I've always said asset quality overrides jurisdiction, and we don't see any reason to change that approach to building out a global business. What the portfolio will have, will have still a majority value derived in more developed countries like The Americas.
And if you look at all the big companies in our peer group, they've all had to migrate to some of the more challenging geopolitical regions of the world. And we would point out that in our opinion, have the best skills to be able to manage those when we do find them in countries other than sort of America, Australia and Canada. And so I hope that answers your question.
Yes, that's fine. And then just on the So
on the dividend, what we've announced today is that as part of this transaction, Barrick is effectively going to be increasing their 2018 dividend from $0.12
to $0.14
assuming the transaction closes. And what we've stated is that we want to continue to grow that dividend over time. And obviously, we'll be assessing that as we get into the transaction, taking into account any
of all of
the variables in terms of commodity prices as well as the strategic initiatives around the sale of noncore assets and any other growth projects. So that will all be factored in. But as has been our past preference, we'd like to grow that dividend and that's our strong intention.
And so just to build on that, Luke, I mean, one of the things as you know, I'm a big investor in Randgold and I'll be rolling that up. And in fact, just a point between John and I will be certainly the leaders in investing in our own companies compared to our colleagues in the industry. And we see and I see and certainly the Randgold Board sees that this opportunity really does create a long term business that will deliver much more than our dividend strategy that we had, because we believe we wouldn't have done it if we didn't think that if we're wrapping up the companies as we have, we wouldn't at the end of the day deliver real value. It's a no premium merger and in their lives, the very basis of what I've always talked about and that is that we want to deliver value for our owners fundamentally, not because we get bought or we buy something at a premium. And again, over time, we've convinced our Boards that, that is the right approach to take that this business will position us uniquely in the gold industry as a company not only with great management.
The most of the top 10 assets, in fact, anybody else doesn't have more than one. And what's more immediate opportunities to develop new Tier one assets as well as to bring the efficiencies to bear with and that's my focus is as we've shown in Randgold. Cost cutting never saves money. It's you've got to have a different way of doing business and a way where you can deliver efficiencies and you have motivated people that make the decisions on the ground and then you really do deliver sustainable profitability. And that's I mean, that's really what attracts me into this partnership.
Great, thank you.
We will now take our next question from Jason Serclo from Bank of America. Please go ahead.
Good morning, gents. Thanks for the call. Mark, your approach to running Randgold historically has been quite decentralized. And I'm just wondering to what extent you see this model working within a business like Barrick. I think the word infrastructure was used.
And I guess you can see the potential for your assets to get plugged into Barrick to be managed. And I guess the concern there is that the value of the assets gets consumed. And I guess more generally, isn't Barrick the exact sort of big gold company you've historically railed against in terms of how not to create value in the gold industry? How do you think you can manage that culture clash?
I'm not sure whether I follow you, but I'll try and answer your question. So we have no intention to changing the way we run the company at Randgold. And if there's anything that John and I are completely aligned on, it's that model. And if you go back to the early Barrick, as he alluded in his introduction, that's exactly what they were about. Very thin head office that held the investments to account, a singular focus on only investing in things that make returns.
And if you look at the I've been talking about succession and Jason, not everyone's been believing me, but one of the things we do have is succession and we're going to affect that. So it allows us to for me and some of the core executives to step away from or up from Randgold and leave a competent management team to run the to continue to run Africa and take on the additional assets. And we don't see ourselves employing anybody extra to do that. And then with the group that we move to the center, we will partner with the core executives that we've all agreed that will be part of this team to run the greater group and will be centralized continue. And if you haven't noticed, Barrick has made a lot of progress in decentralizing their businesses.
And so we'll have a North American team like we will have an African team and a South American team. And our intention is to implement the Randgold Way. And with it comes not just a flat structure, but efficient systems, real time ability to make decisions. John has done a lot of work on cleaning up the baggage and that's always the challenging part. And we there is no culture clash amongst the senior executives between Randgold and Barrick.
We've already had a couple of workshops together debating what we think is we can do with these assets, where we think we are weak and what we have to pluck. And I've got no doubt that and again, we'll deal with the non core assets and we'll focus down to a high quality portfolio that and the one thing about Tier one assets is they generate cash. And when you've got a number of them, like five of them, maybe seven or even more than that, you generate a lot of cash. And so when you look at the presentation I've just given you and you look at the metrics and these are just metrics of today. That's before we've really got into affecting our plan.
I would add to that, this is not any rescue job. The Parekh team is already affecting these drives to improve efficiency, decentralized, flatten hold account. And if you've listened to John speak, there's no difference in his outlook and philosophy to mine. The difference is I've done it. And so I'm intending to come and help get this one up and running as well.
Mark, just to follow-up if I might. I mean, I've had a couple investors ask me this morning, fine, but really would I rather own NewCo or would I rather just continue owning the old Randgold? Like what's really in this deal for Randgold shareholders?
So Jason, I've got a very big investment in Randgold and I'm wrapping this into the deal. So I can see the opportunities. Just explained them to you. And I think it's important. Again, the industry often is held ransom by investors and particularly analysts and opinion makers to keep the optionality apart.
So but for management to have to manage these assets without the ability to actually get investments, the equity support has become nonexistent. Everyone of or many fund managers are managing on a quarterly basis because they don't have an opportunity to invest long term. We believe this asset brings a long term opportunity. And whichever way you cut it, at any foreseeable gold price, whether it's even $1,000 we can get this business delivered and really have something that is completely unique in this industry, and that's our intention.
Jason, would just add to that. As we've alluded to in the presentation, when you look at the metrics compared to the peer group, there's a significant rerating opportunity. So the numbers speak for themselves as well as what Mark's talking about in terms of the bigger picture, longer term vision.
Pleasure.
We will take our next question from Josh Wolfson from Desjardins Capital Markets. Please go ahead. Your line is open.
Thank you. I had a question related to capital allocation in the new company. Obviously, this is philosophically the same between yourself and what John Thornton has talked about. But when you look at the numbers, Barrick has struggled to advance projects in its portfolio that meet 15% IRR at $1,200 an ounce. And if you incorporate the historical Randgold approach of a 20% IRR at a thousand dollars, it looks like nothing would ever meet the filters.
So in the context of Newberic, how does this disciplined approach actually get instituted?
Okay. It's Alzar, Josh. How are you? I'm a little
tired, I'm up.
Why are up early? Are you in Canada? Are you? Yeah. I'm in Denver, yeah.
Josh, the capital allocation is you know how we work. And again, we've got complete allies in the other side. And the way to do it is, first of all, Tier one assets have a long life 500,000 ounce producers producing 15% IRR is a very good investment because the long life assets, you not only get higher returns, but you also you have the optionality of being in the gold business and the cyclicality of gold itself. So we're comfortable with that. And if you do it right and you've got long enough life and you're disciplined about banking those assets properly, you will develop more than deliver more than 15%.
As you have smaller and smaller assets, you require in my mind higher returns because your risk profile moves from well, the opportunity moves from a combination of benefiting from the cycle and optionality in the gold price and just straight returns. So as you reduce the quantum of production and the life of the mine, then you should lift the returns higher. So we would see there's a spread between world class assets plus 3,000,000 ounces that can deliver 20% returns at $1,000 and Tier one assets, which are short of in this industry. We've got we will have five of those 10 to 12 top Tier one assets. And so there we'll start with the 15%, but we've got lots of opportunity, which we've identified both collectively and as part of our due diligence.
And if you've talked to the Barrick team, the opportunity to drive down the underground mining costs, get the cutoff grade down to manageable levels, pick up the efficiencies as far as like development rates, development costs, The whole capital approach, there's a disciplined approach now, but we believe that bringing in the Randgold ownership of projects and not putting as much out to consultants is a much more efficient and effective way of building fit for purpose operations rather than these over engineered mines. And when I say over engineered, I don't mean fit for purpose means that it doesn't last because we build lasting investments. So I have absolute confidence that you'll see us certainly enhance the focus that John has spoken about and started to implement when it comes to capital allocation. And more importantly, as we've shown, it's not only that, it's the discipline of working capital, how you manage that, it's the logistics and procurement and the whole commercial base of the organization. And again, to do that effectively, you've got to have good management systems that allow the management teams to make real time decisions.
And again, the data collection and all that is there. It's not as if we have to go and reinvent the entire wheel, but we definitely have systems that would make the whole effectiveness of management better than it is today.
And Josh, I'd just like to add, I think you've characterized Barrick's existing portfolio incorrectly. We've got three projects under execution in Nevada that deliver well over 15%. We've identified two further projects that we feel deliver have the significant potential to deliver over 15%. One is extra processing in Nevada, really with the benefit of the geologically focused sort of management team now properly understanding the true potential of Nevada, I think, is a huge opportunity in front of us as well as obviously the plant expansion at PV. So what you're characterizing is our decision to prioritize high quality, low risk operations in excellent geological and political jurisdictions versus greenfield high CapEx projects such as Pascagallama and Donlin.
And even those, we continue to understand whether we can look at them in a different way. And that's the benefit. That's the upside opportunity with fresh eyes. With that expertise, we can actually unlock value that to date, we're not being given credit for.
Yep. That's fair. And I and I would say, I guess, if if you were to look at the Randgold existing target returns for that 20% and a thousand dollars, it it may even affect some of those, you know, high priority targets, which would be developed under Barrick's sort of return. So it's in my view trying to understand what the new real filters are and it sounds like that 15% is what's going to be going forward. I have one other question.
Josh,
it's a range. I mean, I just point out that when we started out in Kibali, we didn't have it through our 20% hurdle rate at $1,000 but it will get there. It's a lot better than it was when we started the mine. And the gold price is a lot lower. And the thing about long life mines is because of the cyclicality of gold and if you use that discipline, it builds out.
And so whereas if you look at Marilla or Tongon or Massawa, it's important on these smaller operations to be able to be more disciplined on their turtle rate. So it all comes with the size. And when you we've got five really top quality Tier one assets. That doesn't say that the other non Tier one assets on good cash producers like Tongon. Tongon produces great cash flow.
And so and it's really where do we put that the dollars as we realize the noncore assets, how do we deploy that value? Do we and we will just coming to your next question, the whole thing is that and part of that is the commitment both from John and because you know me about dividends, that's the core of my business. If you don't if you can't run a business with the intention of delivering dividends, then you shouldn't start. And so and John has exactly the same view. So and we've had lots of debates between the four of us, Catherine and Graham and John and I, on exactly what that number is.
And you will see, we are definitely signaling a constructive dividend payment and policy going forward. And otherwise, then your point is valid, then we shouldn't be doing this transaction. If we can't deliver something that's bigger and better than we have, we wouldn't have done that. Why would I do it? Why would I do it at my age with where Randgold is?
It doesn't make sense. Yes. So that I guess takes me to
my next question and I agree with you. Those are very reasonable things to point out. Early in the call, there was a focus on things like adjusted EBITDA for the company. Historically, I would say Wrangel really has focused on profits, which on a relative basis are much stronger for Wrangel today and going forward. And also free cash flow, which are much stronger for Wrangel today than going forward.
So when looking at the combined entity and looking at the sacrifice that you make upfront for that profitability and free cash flow, there needs to be a commensurate significant long term improvement for the combined entity. Am I looking at things correctly like that? Or is it just sort of require a leap of faith on my part?
So you're looking at it correctly. I don't know if it's a definition of long term to deliver. I mean, I think we'll be I believe that the team will you'll start seeing those deliveries even before we close this transaction. And we've set ourselves on a course. And the point is the combination of these two companies boilerplates the delivery of a significant world class gold business, which we haven't seen in our industry for three decades.
Every other company apart from Randgold, if you look back to of significance, if you look back to 02/2008, ten years ago, are trading at share prices at or about or below the share prices of that time. And so and if you take once you wrap it in with the strength cash flow strength of Randgold, we can still deliver on our plans even at $1,000 gold price, which no one else can talk about. So that is a meaningful product of this combination.
We will now take our next question from Richard Hatch from Berenberg. Please go ahead. Your line is open.
Thank you very much and thanks very much for making time for a call. First question is on Massawa, just off the back of that. Mark, does your view on Massawa change with this transaction? I know you've been kind of struggling to get to that 20% IRR of $1,000 But if you adjust those targets, what's your view on Massawa here?
So we I mean, there's no doubt that we will continue to progress the feasibility study and deliver a bankable project and secure the mining license. Because we're in the gold mining business and as I've said in Massawa all the time, our single biggest test is this is the best undeveloped gold asset in West Africa, probably in the whole of Africa as we speak to that, that's undeveloped. And so and we test every dollar we spend, do we add value to that asset or do we not? And we the team has done a great job. It's still working on it.
We're out on tender. We're busy with the licensing and the permitting. We will have that project ready and banked by the end of the year. It will definitely be part of the portfolio that we look at and how best we can bring it to account, just like I said earlier, whether it's Kalgoorlie or Porgera, these assets, it's all about in which hands do they deliver the best returns, how do we maximize and optimize our capital allocation that Josh asked. And that capital allocation means not only just taking the money you're making and investing it, it's realizing your assets and rearranging it into better assets with better returns.
And while you add it, and I know you didn't answer the question, but I'll give you an answer anyway. Nevada in itself is an opportunity, which everyone's talked on. John has tried multiple times to get to look at the unification. And again, both of us have had conversations. I know John has had a number of conversations with the various operators in that region.
And again, our philosophy is that if we and you know, we have a very strong joint venture philosophy. Thank you, Catherine. And we'll we think that as long as we can in any project demonstrate that we create better value by making a different decision for our owners, we will do it. And I think we are completely aligned on that.
Okay. Thanks, Mark. And then the second one is following up on an earlier question asked. Just thinking about the portfolio size itself, do you consider an optimum number of assets in that portfolio as a sweet spot? Or do you think that as you talk to the kind of regional heads that the number of assets within the portfolio becomes less of an issue because you're letting those regional heads focus on the business?
Well, I think what we're seeing in the first instance is the ability to scale up because of succession plan. So we've been working at this very hard. You've seen Randgold has been managing multifaceted challenges over the last six months, and we've managed them extremely well. And we are very confident that we'll continue to add value and to rectify some of those situations over the next couple of quarters. So and then the way and again, this is an opportunity for me to demonstrate that the Randgold model, which I've always said, because if you build competent, accountable, focused management that are able to run like Randgold's team in Kibali runs a Tier one asset in an independent fashion and with the support of the corporate experts and likewise with Lulo Gronkoto.
And we see the North American opportunities as very significant and it's all about quality. So right now, we're to embark with a set out with six core assets. We pointed to the potential for additional opportunities to add to that sort of the ice cream portion of the company. And I've always said six or seven assets is important. We've got a much bigger platform now to play on.
And we've got some excellent skills, very competent people in the different jurisdictions. And we've always said that for us to migrate out of Africa, we've got to join with people who have incontinent cultural understandings and knowledge, and we definitely come with that. So what I'm bringing is the philosophy, discipline and the systems that one needs to be able to affect efficient and profitable businesses. As far as the competent people are, we've got them. We've met them.
We've talked. We've agreed. And so and the executive team, it will be split pretty much fifty-fifty. And we're very happy that on a DNA cultural basis, we are very aligned already. We've already had a number of workshops and we really do see and that's the fact that John cleaned up a lot of the old sort of
baggage.
I'm going to be careful what I say. It's easier to implement to change because we don't have to go and clean up.
Fair enough. Well, luck, Mark. I'm sure that the some of the execs will see the whites of your eyes. So enjoy that and good luck with it. Cheers.
Thank you. Operator, as we're nearing the end of our time, the next question will need to be our last question.
No problem. So we will now take our last question from Grant Spore from Macquarie. Please note for any further questions, there will be a call later this afternoon. Just
two quick ones, and I suspect I know the answer to the first, but I'll ask it anyway. It is, have you given any thought to any sort of synergies that you may extract out of the business? Understand through the discussion, it's more about the longer term, but some investors that I've spoken to would like to know. And then the second one is just I'm a little bit perplexed as to why you need regulatory clearance from South Africa in this transaction. It seems a little bit odd to me.
Who's speaking there? It's Grant. Grant. It's Grant. Okay.
Hello, Grant. How are you?
Hi. I'm well. Thanks. Yourself, Mark? Well done, by the way.
Good. Thanks. Thanks. So synergies there are synergies, very clear synergies in Africa particularly because we can operate the entire portfolio that will be double the size with exactly the same structures, corporate infrastructure, everything else. So there will be real synergies and as we progress collectively to find a solution that really delivers better value and more transparency in Tanzania, we will unlock many synergies we believe.
On the other side, we've got benefits, maybe not by definition synergies and that is one of the things that we found and probably knew as well is Barrick's open cost skills and the way they manage their dispatch system, everything is leading in the industry in all aspects. And as you know, we've become very efficient underground miners but we have a contractor running our open cast mine. Bringing the Barrick team in to have a look at our open cast business will be I believe that there's real opportunity for benefits there. And then the way we run our underground mines, the whole the fact that we are a younger, more agile organization. And there's a very big component of the future in the Nevada assets of migrating to underground.
And we believe with our geo centric approach, the fact that and a lot of the optimization in the last five years has been around free cash flow. And we optimize assets based on their geological potential. And it's a different way. And so there isn't a phase of investment required to really revitalize some of these assets because they've been not as much capital as should have had gone into them as the company has managed its debt down. And talking about that, the whole we both agree that we should be focusing in on the debt.
It comes with benefits. It needs to be managed over the long term. Despite the long term nature of the debt, we still think that we should deal with it. And so and then when it comes to logistics, procurement, we think there's enormous synergies and benefits because of our approach because our business is all about logistics because of our locations. And there's many opportunities to do that.
Our whole obsession with getting working capital down to as little as possible And also our approach to project development feasibility study management, we prefer owning those processes rather than putting them out to consultants. So I think and then with that comes more accountability projects that are easier to bring into account. If you know all our mines we've ever built have made real profits, that's bottom line profits in the first quarter that they've been commissioned. So I think we're I mean, there's lots to do. There's lots of opportunities.
We wouldn't do this if there weren't opportunities. And we've had to work hard with the team together to make sure that this is the best opportunity not only for Randgold, but also for Barrick.
So Mark, sorry, just to just on Africa procurement and logistics. If I were to pencil in sort of CHF 200,000,000 of synergies over the next year or so, would that be unreasonable?
On logistics and procurement,
Grant, the one thing we're
not allowed to do is promise you anything.
So Grant, just to say, you know that in terms of the takeover code, they're very strict rules. And anything we put in the in our 2.7 announcement has to be verified. So as much as we pointed to the fact that we will be eliminating nonessential costs, we can't say more than that.
This is my corporate governance guy talking.
Okay, fair enough. And then sorry, just on the small point about needing regulatory clearance from South Africa. Can you just
explain Yes, got why that this very simple. Acacia processes its gold at Rand refinery and so do we. So it's often it's common trigger to go to the regulators to get that clearance and it's for all intents and purposes of procedure.
It's just a function of Okay, alcohol is refined lovely. Thank you very much.
Okay. Very good. Thank you. And before we leave, just want to leave you all with some quick bullet points to summarize how we see this transaction. First thing I want to remind you of is this is a nil premium deal.
I've looked back over the last ten years, there's no such thing.
You can't find it in
the gold industry. You know very well that the gold industry is specialized in paying big premiums and destroying shareholder value. That's this is the this is one in a row. Secondly, it's got the strongest management team. I was just looking this afternoon at the share price performance of Randgold over the last ten years, up 96%.
The share price performance of the senior gold majors, down 50%. The senior gold majors have destroyed upwards of 75,000,000,000 of value in the last ten years sorry, in write downs in the last ten years. Randle has never written down a penny. Third, we talked about the five Tier one minutees plus the two very high potentials in Nevada, plus the potential of Valadero, plus the potential of North Mara at Acacia. So you could see a company here with nine Tier one minutees in the not too
distant
future. Fourth, this company will have the highest margins by a lot, eight to 12 percentage points higher than all the other senior gold mines gold companies. Fifth, it's going to have the least leverage. Six, it will have the best returns. Seven, it's going to have the cash flow necessary to invest in these projects I mentioned a minute ago.
Eight, it's going have the philosophy that Rangel has always had and I've always believed in of increasing dividends over time. And then finally, point that Grant made earlier, the potential for rerating is substantial. So when you add all that together, it's very hard to see how this isn't the most compelling investment in this sector by a long way anytime soon. So thank you for joining us. Buy lots of shares, and see you soon.